Fitch rates Cemex note BBB

Fitch Ratings said it assigned a BBB rating to the €500 million notes due 2014 to be issued by Cemex Finance Europe BV. The notes are guaranteed by Cemex Espana SA, which is controlled by Cemex SAB de CV.

The rating was placed on Rating Watch negative, where Cemex's BBB foreign- and local-currency issuer default and senior unsecured ratings and AA+(mex) national long-term rating and Cemex Espana's BBB issuer default and senior unsecured ratings were placed in October following Cemex's announced intention to make a tender offer to acquire all of the outstanding shares of Rinker Group Ltd. for $12.8 billion in cash and debt assumption.

Proceeds from the notes will be used primarily to repay some debt of Cemex Espana and its subsidiaries and for general corporate purposes.

The agency said the BBB rating assigned to the notes is based on the credit quality of Cemex Espana and its subsidiaries. For the 12 months ended Sept. 30, the company had a net debt-to-EBITDA ratio of 1.1x. In Spain, strong ready-mix and cement demand persists on the back of robust residential construction and infrastructure spending; the rest of Europe, South America, Central America, the Caribbean, Asia, Africa and the Middle East have also reported strong performance; favorable demand conditions continue to support price increases; and productivity gains are also offsetting a portion of incremental energy costs.

In the Untied States, weak residential demand in recent months, partially offset by public sector construction, has driven volume declines in cement and ready-mix, Fitch noted.

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